A client’s mother, living on the Upper East Side, recently had a stroke. Her daughter was her appointed agent under a durable Power of Attorney. When the daughter went to the bank to access funds for her mother’s long-term care, she presented the document. The bank manager was polite but firm. He could grant access to her mother’s personal checking account, but the bulk of the assets—held in a revocable living trust—were off-limits. The daughter was stunned. She had the Power of Attorney; wasn’t that enough?
My firm sees this situation with surprising frequency. It stems from a fundamental misunderstanding of what a Power of Attorney can and cannot do, especially when a trust is involved. These are two powerful documents in estate planning, but they operate in separate spheres. They are not interchangeable. Assuming one can control the other is a path to frustration and, in a crisis, delay.
Two Keys for Two Different Doors
The simplest way I explain this to families is to think of it as owning two different properties. A Power of Attorney is the key to the property you own in your own name. A trust is a separate property with a different lock, and only the trustee has the key.
A Power of Attorney is a document where one person (the principal) gives another (the agent) authority to act on their behalf in financial and legal matters. This authority, however, extends only to assets titled in the principal’s individual name—bank accounts, real estate, and brokerage accounts. The agent steps into the principal’s shoes for those specific assets.
A trust, on the other hand, is a separate legal entity. When you create a trust and transfer assets into it, you no longer own those assets as an individual. The trust owns them. The person who manages those assets is the trustee. The trustee has a strict fiduciary duty to manage the trust property according to the terms you laid out in the trust document, for the benefit of the named beneficiaries.
Your agent under a Power of Attorney has no inherent authority over trust assets because you, the individual, no longer own them. The trustee is the only one with the key.
Can an Agent Ever Act for a Trust?
Here, the law becomes nuanced. What happens when the person who created the trust (the grantor) is also the current trustee, as is common with revocable living trusts? If that person becomes incapacitated, can their agent under a Power of Attorney step in and act as trustee?
The answer is maybe—but only if the documents are drafted with deliberate intent. In New York, the statutory short form Power of Attorney contains a provision for “estate, trust, and other beneficiary transactions,” governed by General Obligations Law § 5-1502I. If this power is granted, it gives the agent the ability to act for the principal in their capacity as a fiduciary, which could include acting as trustee.
This is not a guarantee. We find that many financial institutions will still refuse to honor it. Why? Because the trust document is the ultimate authority for the trust’s assets. If the trust agreement itself doesn’t explicitly state that an agent under a Power of Attorney can act for an incapacitated trustee, the bank will almost always defer to the trust’s own succession plan. A well-drafted trust names a successor trustee—a person designated to take over if the initial trustee can no longer serve. This is the cleaner, more reliable contingency.
Harmonizing Your Documents for a Real Crisis
Relying on a Power of Attorney to manage a trust is, in my experience, a flawed strategy. It invites conflict and can be rejected by the very institutions you need to cooperate with. The trustee’s duty is to the trust agreement, not the Power of Attorney. If there’s ambiguity, the bank’s default is to protect the trust assets by waiting for the named successor trustee to take control.
Stewardship. That is the goal of a well-considered estate plan. It means creating a set of instructions that is clear, integrated, and functional under pressure. Your Power of Attorney and your trust must be drafted in concert, not as separate documents that might one day contradict each other. The roles of agent and successor trustee should be clearly defined, and the individuals chosen should understand their distinct responsibilities.
This isn’t about avoiding a headache at the bank. It’s about ensuring that in a moment of family crisis—when a loved one is suddenly incapacitated—the plan you built works as intended. The funds are available. The care is paid for. The legacy you built is managed by the person you deliberately chose for that role, without a legal fight or a frozen account.
If you have both a trust and a Power of Attorney, the documents should be reviewed together. The first step is an audit to identify potential conflicts. We can sit down with your existing documents and map out exactly who has authority over what, and under which circumstances, before it becomes an emergency.
